General Electric Co. (NYSE: GE) Chief Executive Officer Jeff Immelt has said "it’s our belief that every industrial company, in the coming age, is also going to be a software and analytics company. The people that deny that digitization is going to impact every corner of the economy are going to be left behind."
Apparently, General Electric is doing exactly what Immelt admonished other businesses to do. He is expanding into new areas for his company in order to increase sales revenue and eventually produce more profit for his shareholders. While most businesses are not publicly held like General Electric, the same principles of growth can be applied.
In order to increase the sales of your business, you need to perform an in depth review of your sales revenue. Include sales leads as part of your analysis. Identify the major categories of your sales revenue. Break each category into sub-categories. You should be able to identify one or two categories that significantly impact your top line. If you want to achieve fast growth, concentrate on your areas of superiority; obviously, they are working well for your business. Try and achieve granularity in your analysis. Determine why those areas are significant revenue generators.
For example, Netflix used data in a unique way to take their sales revenue to the next level. They were able to obtain information on what movies people watched and how they were rated. Netflix took the information and created a series of algorithms or mathematical formulas that allowed them to recommend other films the viewer might enjoy. It was (and is) a great way to help their customer narrow down choices for what to watch next. And the rest, as they say, is history.
Identify or create a tactic in your sales channels that could result in increased sales like re-doing your website, obtaining and publicizing customer referrals, or giving away samples. If your product or service is capable of being ordered over the internet, that capability alone could help you.
Hank Moore, author of The Business Tree: Growth Strategies and Tactics for Surviving and Thriving, cites many principles of growth in the area of increasing your sales revenue.
Sell New Customers– You must continue to constantly reach out and obtain new customers. Consider using your sales lead data to determine your conversion rate, or how many calls must be made to new customers in order to achieve a sale. If you are unable to add to your customer base, your business will suffer in the long run.
Cross-Sell Existing Customers– Review your current customer data base. Consider reaching out to them in order to make them aware of the other services or products you offer. It may have been a while since they were made aware of what other services or products you offer, so it never hurts to inform them from time to time. Sales to an existing customer are going to be much easier and a lot faster than trying to sell to a new customer. Existing customers are excellent sources for referrals.
Create and Market New Products or Services– Be on the lookout for new products or service offerings. Start following your industry trends and adapt your product line accordingly. Take the time at least once a year to meet and brainstorm with your staff to come up with new ideas for services or ways you can increase your sales. Think General Electric.
Creatively Partner in Order to Create Additional Marketplace Opportunities– The days of a business operating in a solo environment are gone. Be on the lookout for other companies you can team up with to seek out and acquire new customers.
Vertical Integration– If you are in wholesale, consider expanding into another product line. Or, you might consider some small area of manufacturing. If you are in manufacturing, you might want to consider getting into some form of distribution that relates to your industrial segment. Be careful not to disrupt your sales channels.
Horizontal Integration– Stay within your industry , but branch into other areas or niches. For example, if you do computer programming, consider expanding into hardware sales.
Geographic– Expand your company from a local presence to a regional presence.
Experiment with new approaches. If you get some traction in one area of sales, continue to pursue it. If you are able to thoroughly analyze your sales data, many things should become apparent to you. Strive for new ways to grow your sales and grow your business.
Dan Arens is an Indiana-based business growth advisor.